Stimulus Bill Provides Small Business Support
Business News for December 22, 2020
We are now starting to learn details of the much-anticipated new stimulus bill, which has passed in Congress and is awaiting a signature from the President. As with all forms of aid that we have seen during COVID, it is likely that specific details will emerge as we move into 2021. Here is what we know so far:

Paycheck Protection Program (PPP)
For New PPP Loans

The PPP application process will reopen to allow select businesses to apply for a second round of loans. Eligible businesses must have:
  • Been in business before February 15, 2020
  • Fewer than 300 employees per location
  • Used, or will use, prior PPP loan if previously received
  • Seen at least 25% revenue decrease in gross receipts during any quarter of 2020 (compared to the same quarter in 2019)

For this round of PPP loans,
  • The maximum loan amount is $2 million.
  • The 60-40 cost allocation between payroll and non-payroll costs will continue to apply.
  • Application process is simplified for loans below $150,000.
  • This application process has not yet opened.

For Already-Existing and New PPP Loans
The package allows 40% of expenses to be used on items beyond payroll. In addition to mortgage/rent and utilities, these now include:
  • Operations expenditures (i.e. software and cloud computing needs)
  • Property damage costs due to public disturbance
  • Supplier costs for supplies ordered before the loan was received, or perishable goods ordered before or during the loan

Businesses will still need to spend at least 60% on payroll expenses, which the program specifies includes employer-provided group insurance.

Grants for Venues and Accommodations
Referred to as the Shuttered Venue Operator Grants, these will be offered for live venues, theaters, and museums that have lost at least 25% of revenue. The money received form these grants will be for specified expenses, such as payroll, rent, utilities, and PPE. The hardest-hit (90% revenue losses) will be eligible for the first 14 days of the program, followed by those with 70% revenue loss in the next 14 days, followed by all other eligible entities.

Economic Injury Disaster Loan (EIDL) Changes
When EIDL loans were first activated, businesses were eligible to receive up to $10,000 as an "advance" (treated as a grant) based on the number of employees. Given changing rules, most businesses received no more than $1,000 per employee. Now, businesses in low-income communities can receive the difference, up to $10,000 total.

Pandemic Unemployment Assistance, or PUA
The original Pandemic Unemployment Assistance - put in place by the CARES Act in the spring - expired July 2020 and provided $600/week in additional benefits. The updated plan provides $300/week in additional benefits. More details will be forthcoming.

Extension of the Debt Relief Program (Section 325 of full text)
Resumes the payments of principle and interest on SBA 7(a), 504, or microloans, as established in the CARES Act. This extension offers three additional months of payments on existing SBA loans starting in February 2021. The program will also offer six months of payments for new loans closed between February 1, 2021 - September 30, 2021. More information to follow as updates become available.

Individual Stimulus Payments
The bill stipulates $600 stimulus payments to individuals making less than $75,000 adjusted gross income. Those making between $75,000 and $99,000 will receive a lesser amount, and those making more than $99,000 will not receive a payment.

Information compiled from: CNN, the House Summary of Small Business Measures, and details from the text of the full bill.
Additional Stimulus Package Resources
This stimulus package bill clocks in at well over 5,000 pages. Given its length and complexity, we anticipate that additional details will continue to emerge over the next few weeks. The Small Business Administration has been given 10 days after the date of signature to issue guidance, meaning that small business owners will not be able to take action (such as applying for a PPP loan) until early January at the soonest.

How to Prepare Before Additional Guidance is Issued
  • As always, ensure that your financial statements are updated and in order.
  • Prepare a Profit and Loss statement for each quarter of 2020, and be prepared to compare that information to 2019.
  • Contact your lender to express your interest in the second PPP Loan program.

Due to the holiday season, the UW-Madison SBDC will have limited staffing. We will be monitoring changes and will have updated details the first week in January as they come available. In the meantime, if you are looking for additional information, here are a few resources:

Related Webinar
SVA Financial Group Stimulus Program Webinar
SVA Financial Group is hosting a webinar on Wednesday, December 23 from 12p-1p. The webinar will discuss the stimulus package, with a focus on its impact on businesses. In particular, the session will focus on the implications of the stimulus package on the Paycheck Protection Program (PPP).

Interested in attending? Register here
Paycheck Protection Program (PPP) Loan Forgiveness Webinars
More borrowers have used their PPP loan proceeds and are now eligible to submit their PPP forgiveness applications to their lenders. Walk through the PPP loan forgiveness process and find SBA partners who can assist you. 

Webinars are free and require advance registration. *NOTE: This webinar was scheduled before the stimulus bill passed through Congress and is subject to change.

Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance. Contact the UW-Madison SBDC office at or 608-263-2221 to request accommodations.

The Wisconsin SBDC Network is a proud part of the Institute for Business & Entrepreneurship in the University of Wisconsin System. It is funded in part through a Cooperative Agreement with the U.S. Small Business Administration.